John Armstrong: We thought we'd beaten plagues, we were wrong

Blacker and blacker. The relentless and merciless march of Covid-19 has humanity enveloped in an ever deepening and very frightening darkness of mood rarely experienced in modern times — and never on a scale that included the globe in its entirety.

The virulency of the pathogen has rocked civilised societies to their very core. That no-one is guaranteed exemption from its reach makes the microbe an even more scary organism.

Humankind’s arrogance has been such that it was simply taken as a given that plague and pestilence had been conquered both for now and all time.

We have long worshipped at the Altar of High Technology. That our faith has turned out to be so misplaced when it really mattered has been a further shock of similarly rude proportions.

We might be so sophisticated that we are capable of depositing motorised vehicles onto the surface of Mars and steering them across that planet’s barren landscape. That we are struggling to understand the landscape of something which has landed in our midst with such destructive impact has brought us back down to Earth in a hurry.

That the landing has been so rough has exposed and intensified another anxiety which has been eating away at the human psyche during the three months or so that have followed the diagnosis that coronavirus was not confined solely to the Chinese metropolis of Wuhan.

That anxiety is a palpable sense of powerlessness; a loss of control of what is happening in our lives. That such feelings are unsettling and disturbing in the extreme goes without saying.

What has made things incalculably worse has been the sheer speed of the turn of events.

Given the time to do so, the human condition has proven capable of adjusting and adapting to most circumstances that it has been forced to confront.

That resilience is now undergoing the toughest of tests.

There is no going back to what once was. The status quo is something marooned in what has swiftly become a quite distant past.

Instead, we now find ourselves clutching one-way tickets for a journey upon which no-one wishes to embark.

The destination? Where else but the “new normal” via “lockdown”.

While there has been plenty of discussion as to what elements might constitute the new normal, there have been few attempts to paint the big picture. So let’s try to join the dots. Or some of them at the very least.

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The staggering statistic was announced by world health officials this morning.
Source: Breakfast

It’s the economy, stupid. Or rather what’s left of the economy.

Jacinda Ardern and Grant Robertson, her trusty Minister of Finance, have poured what not long ago would have been regarded as obscene dollops of cash into the corporate world, alongside taking other radical steps to temporarily shore up New Zealand Inc. in the hope that vulnerable sectors can survive the duration of the pandemic and emerge reasonably intact.

The Reserve Bank has likewise come to the party to which no-one would wish to get an invite by not hesitating in applying the tools of monetary policy to help trading banks prop up business enterprises.

This week’s new normal, however, has been big-number job losses and major wage cuts in industries whose revenue streams have dried up overnight.

Hardest hit have been tourism, the national airline and the mainstream media. It is brutal to say so, but those sectors were probably beyond saving in the current economic climes.

The question now is whether more such large-scale amputations can be expected. The question which naturally follows from that is whether those companies shutting up shop for good are the advance cases of many more such closures and thus herald the economy’s spiral into depression.

Repeat depression — not recession.

The proverbial elephant in the room is more akin to the Mother of All Mammoths.

For all the mentions of so-called “mortgage holidays” being all about ensuring people don't lose their homes, the unspoken rationale for the Government’s push for such a mechanism is to avert a collapse in the already long-overheated residential property market.

A drastic drop in house prices would have a cataclysmic impact on economic confidence generally.

The simple fact is that house prices have always been a casualty during the not inconsiderable number of recessions that have pockmarked New Zealand’s history. It defies logic to think that this time things will somehow be different.

To adapt Winston Churchill’s famous quote, this has not been capitalism’s finest hour.

Be it the naked greed of those auctioning off tiny bottles of hand sanitiser on TradeMe at $50 a pop. Or be it the $15 cauliflowers filling the fruit and veggie sections of allegedly price-gouging supermarkets.

Or, at the other extreme, be it cruise ship companies seeking taxpayer-funded bailouts despite having flown flags of convenience on their vessels in order to dodge paying tax at all. Much of the new normal seems firmly rooted in the old normal.

For (baby) boomers, the free ride has to end.

Regardless of how the dust has settled when the immediate coronavirus crisis is over, terribly tough and torrid times now await the country’s younger generations.

Issues of inter-generational equity and fairness are going to come to the fore. Inevitably so.

That means the introduction of a capital gains tax. It means means-testing the state pension.

Will those things eventuate? In two words, fat chance.

There could be some good news.

The initially inept, inadequate and incoherent response of Donald Trump to what he labelled as a Democrat Party “hoax” would surely have alerted voters to the poverty of the populist politics.

Covid-19 has proven to be immune from the cheap slogans and simplistic solutions espoused by shallow politicians. To defeat the virus requires the application of pure logic and the scientific method.

But therein lurks bad news.

The problem is that the numbers of jobless thrown onto the scrapheap in the interim will create the fetid conditions political zealots are guaranteed to exploit.

Surely the eventual elimination of the coronavirus offers a heaven-sent opportunity to construct a new world economic order out of the ruins of the current one?

Don’t the darkest of clouds now stretching to the horizon and beyond have the silver lining of enabling us to tackle climate change in a far more serious and determined fashion than pre-virus?

That’s true. But the discomforting story lurking behind the horrid headlines of recent weeks has been the haphazard international response to the virus.

It has been every country for itself. The exception has been the co-operation of the worldwide scientific community in the desperate search for a vaccine.

When it comes to climate change, however, we don’t need more science to tell us what to do.

There has to be the collective will to do it. It requires every consumer and every industry to pay the true cost of pollution instead of continuing to freeload on the environment.

It means no longer paying unacceptably cheap prices for products manufactured in China and other Asian nations.

Therein resides a truly awful paradox. The country which was the source of Covid-19 is now seen as the solution to current economic woes.

China’s economy might well soon boom once more. That would see that nation’s carbon emissions back to or exceeding pre-virus levels as its coal-powered electricity generators are re-stoked to the maximum.

In short, making the tackling of climate change the No.1 priority will mean sacrificing the standard of living previously enjoyed by the bulk of society at the very time when other sacrifices will have to be made.

How much public appetite is there going to be for that kind of scenario? Very little, if any at all.

The virus does not mean the world is coming to an end. But it all looks like being the end of our world as we have known it.

That, in short, is the new normal. Getting used to that new normal is going to be a hard enough slog for just about everybody, without throwing climate change into the mix as well.